Warren Buffett's recently announced investments in railroads have caused many to consider this sector. But with stock prices for rail operators up sharply since the news, investors might want to consider another track to invest in the sector.
Indeed, one advisor who was already riding the rail sector is Elliott Gue, contributing editor to Personal Finance newsletter, who recommends a trio of companies that make and lease railcars.
First up is American Railcar Industries (NSDQ: ARII). Gue notes that deliveries of is railcars soared 32% in the final quarter of 2006, primarily by sales of ethanol tankers.
He adds, "In addition to ethanol demand, there's a strong replacement cycle underway in the tanker car business. Specifically, new government safety requirements are forcing shippers to upgrade and replace their older carriers with safer models."
Comfort Zone Investing: The unmighty dollar
Five winners of a weak dollar
For a quick-read on the U.S. economy, check the price of gasoline
